Published Wednesday, April 11, 2012
"After eight years of this administration we have just as much unemployment as when we started and an enormous debt to boot!”
Those were the words of Henry Morgenthau, Treasury Secretary under Franklin Roosevelt, after two terms of FDR’s massive spending, tax hikes and regulatory schemes. One could say much the same after more than three years of the same toxic formula under Barack Obama.
That’s not a partisan statement any more than was Morgenthau’s. In fact, Obama simply doubled the rate of massive spending, tax hikes and regulatory schemes of the Bush administration.
And therein lies the primary reason why we have the worst and slowest recovery after a recession since the 1930s.
FDR campaigned against incumbent Herbert Hoover in 1932 on a platform that called for a 25 percent reduction in federal spending. He rightly attacked Hoover for his huge increases in spending, taxes and debt. FDR’s running mate, John Nance Garner of Texas, accused Hoover of “leading the country down the path to socialism.” But then upon election, the Roosevelt-Garner administration gave us bigger doses of precisely what they criticized, and as a result the economy stayed stuck in depression for years.
Today, business investment is near a three-decade low — for some of the same reasons it plummeted under Hoover and FDR. If the government is busy punishing those who invest, they won’t invest.
The Obama administration is jamming new regulations down the throats of businesses big and small at a record pace. The Competitive Enterprise Institute estimated that regulations cost Americans a record $1.8 trillion last year. That compares to $3.6 trillion in spending. That means the U.S. government is imposing a 50 percent hidden tax on top of all of its spending, an amount 10 times the total collected from corporate taxes.
In early March a unanimous Supreme Court rejected an attempt by the EPA to declare one couple’s dry property a wetland, impose fines of $37,500 per day for unknowingly violating the Clean Water Act, and prevent any appeal until the agency moved to enforce its compliance order, which would earn another daily penalty of $37,500. Even the liberal justices wondered how this regulatory nonsense could happen in America.
This administration has spent its entire time in office attempting to reinflate the housing bubble through regulations and subsidies. It wants to effectively dramatically boost taxes on capital gains. Its health care overhaul, if allowed to stand, is already projected to cost at least twice its original projections just two years ago. It preaches envy and class warfare at every turn.
World War II brought the unemployment rate down below 10 percent because 11 million men were drafted out of the work force, but standards of living in America didn’t recover until the war was over, when federal spending collapsed and sky-high business tax rates were slashed.
Sooner or later you’d think we’d learn that too much government is a curse, not a blessing, no matter which party delivers it.
(Lawrence W. Reed, a resident of Newnan, is president of the Foundation for Economic Education in Irvington, N.Y., and Atlanta.)